100% Financing in Delaware: The USDA Section 502 Direct Loan

If you are a low- or very-low-income homebuyer looking to purchase property in a rural area of Delaware, the USDA offers an unmatched financing tool: the Section 502 Direct Loan Program.

Unlike guaranteed loans that are funded by private banks, a Direct Loan is funded directly by the U.S. Department of Agriculture to help families who truly have no other way to afford homeownership.

The USDA Direct Loan Advantage

• Zero Down Payment: Typically, no down payment is required to purchase a home using this program.
• Payment Assistance Subsidy: This program provides a payment assistance subsidy that temporarily reduces your mortgage payment based on your adjusted family income. When modified by this assistance, your effective interest rate can drop to as low as 1%.
• Extended Payback Periods: While most mortgages are capped at 30 years, the USDA Direct Loan offers payback periods of up to 33 years—and up to 38 years for very-low-income applicants who need maximum help affording the payment.

Who Qualifies?

You must be currently without decent, safe, and sanitary housing, and be unable to secure a loan from traditional lending sources. The home you wish to buy must not exceed the applicable area loan limits and cannot be designed for income-producing activities.

Additionally, the property must be in an eligible rural area, and your adjusted household income must fall within the program's limits for your county and family size.